Background

In a determination published on 6 January 2025, the Pensions Ombudsman upheld in part Mr N's complaint against the trustee of the Volkswagen Group Pension Scheme. Mr N had complained that the trustee had lost records relating to his transfer out of the scheme in 1991, failed to keep him informed of developments in the GMP equalisation exercise it was carrying out, and taken too long to calculate his GMP-equalised benefits. The Ombudsman dismissed Mr N's complaint insofar as it related to the lost records and the timescale of the GMP equalisation exercise, but upheld the part of his complaint about the trustee's failure to keep him informed of the progress of the exercise. The Ombudsman awarded Mr N GBP 500 for distress and inconvenience.

The determination can be viewed here.

Key takeaways

• The Ombudsman understands that GMP equalisation exercises "will take a reasonable period of time to implement." Although the Ombudsman is not bound to follow this determination in relation to any future complaints in this area, it provides a helpful indication of how the Ombudsman may approach similar complaints. The Ombudsman's comments in the case suggest that, provided trustees are engaging with the issues which the Lloyds litigation gave rise to and have a plan in place for how they will deal with GMP equalisation, the Ombudsman is likely to be sympathetic about the length of time it is taking to implement GMP equalisation projects. Following the Lloyds litigation, trustees of formerly contracted-out DB schemes are required to equalise pension benefits between men and women to allow for the effects of unequal GMPs accrued during the period 17 May 1990 and 5 April 1997.
• The Ombudsman said in relation to the GMP equalisation measures which the trustee was putting in place in this case: "This is a difficult and complicated project, and it is important to ensure it is carried out correctly. Therefore, although it should not be unnecessarily delayed, it is understandable that it will take a reasonable period of time to implement." Whilst this determination will be reassuring for trustees who are currently in the midst of GMP equalisation exercises, trustees should continue to press forward with implementing projects. The risk of similar types of complaints succeeding in the future will depend heavily on the particular circumstances but, as time progresses, it is likely to become harder for trustees to successfully argue that the time they have taken is "reasonable".
• Trustees should make sure that they follow through on any express commitments which they have made to keep individuals informed about the progress of GMP equalisation exercises. The Ombudsman emphasised that in this case that the trustee had agreed to keep Mr N updated on the progress of the project, and it was the trustee's failure to follow through on that agreement, rather than the failure to communicate in itself, that justified a distress and inconvenience award. Trustees should be aware of what they have said to members previously, so that if project timing is slipping and not keeping to the anticipated timescales, then members should be kept updated about any revised timings.
• It is understandable that trustees will have incomplete records for members who have transferred out of a scheme. The Ombudsman noted that Mr N had transferred out of the Scheme some considerable time ago and that, in any event, the amount of data kept in respect of past transfers is limited. It was also significant that Mr N failed to show that he had incurred any loss as a result of the perceived maladministration.